UAE banks’ investments exceed Dhs580 billion by end of August

The UAE banks’ investments surpassed Dhs580 billion, hitting a record high in August 2023, according to the Central Bank of the UAE. The investment grew by 19.5 percent year-over-year to reach Dhs585.4 billion by the end of August 2023, up Dhs95.6 billion from Dhs489.8 billion in August 2022.

The CBUAE in its banking indicators report issued on Wednesday, said that banks’ investments increased by 1.02 per cent month-over-month to Dhs 585.4 billion in August 2023, up Dhs 5.9 billion from Dhs 579.5 billion in July 2023. Banks investments also increased by Dhs 58 billion or 11 per cent year-to-date compared to Dhs 527.4 billion at the end of 2022.

Bonds held until maturity accounted for the largest share of bank investments at 47 percent, reaching Dhs 276 billion at the end of August 2023, up 3.4 percent month-over-month from Dhs 266.8 billion in July 2023.

Banks’ investments in debt bonds accounted for 42.1 percent of total investments, totalling Dhs 246.5 billion at the end of July 2023, up 0.16 percent from Dhs 246.1 billion in August 2022.

Banks’ investments in shares rose 0.8 percent month-over-month to Dhs 12.6 billion at the end of August 2023, and 6.8 percent year-to-date compared to Dhs 11.8 billion in December 2022.

Other banks’ investments totalled Dhs 50.3 billion at the end of August 2023, up 12.5 per cent from Dhs 44.7 billion in August 2022.

Notably, bank investments do not encompass the bank’s deposits with the Central Bank, such as certificates of deposit and cash bills.

Meanwhile, the Abu Dhabi Commercial Bank has reported its financial results for the third quarter of 2023 (“Q3’23”).

Record quarterly net profit driven by solid momentum in loan growth and increased net interest margin. The UAE economy remains resilient with strong long-term fundamentals and ADCB is well-positioned to benefit from robust consumer and business confidence.

 Net profit of AED 1.942 bn was steady QoQ and increased 22% YoY.  Net interest income of AED 3.179 bn increased 8% QoQ and 24% YoY.

 Total assets of AED 537 bn increased 10% from Sep’22 and were up 8% YTD

ALA’A Eraiqat, Group Chief Executive Officer, ADCB, said: ADCB is delivering notable growth this year, with all our major businesses performing effectively on our corporate strategy. Nine-month net profit increased 24% to Dhs 5.752 billion, with a strong return on average tangible equity of 14.3%.

In our core market, the UAE, the economy has remained resilient in the face of global headwinds. ADCB is leveraging its strong franchise and digital proposition to serve a growing customer base amid robust consumer and business confidence. Looking into 2024, we remain confident in the country’s fundamentals and continued investment in its economic diversification strategy.

In this context, the Bank has extended AED 52 billion of new credit year to date, helping to drive substantial net loan growth of 10% in the period.

Building on its recently rebranded proposition, the Corporate and Investment Banking Group has experienced strong credit demand across diverse sectors, particularly GREs, energy, trading and financial institutions. The business is committed to serving the mid-size corporate and SME segment, with over 1,400 new clients onboarded in the third quarter.

New retail credit was 43% higher year on year in the third quarter, with disbursement of new personal loans at its highest ever level, and strong demand also experienced for mortgages and auto loans. The Retail Banking Group set a fresh quarterly record of 167,000 new customers(1), with over 80% welcomed to the Bank through digital channels. Furthermore, the card business also reported its best ever quarter, with over 67,000 new primary cards issued.

Meanwhile, ADCB Private has rapidly become a leader in private banking in the UAE, expanding its customer base by a third this year.

As our business expands, we are investing further in the Bank’s capabilities and people. ADCB continues to make a substantial contribution to the UAE’s progressive Emiratisation agenda and UAE nationals now represent 40% of the Group’s employee base. We welcomed over 200 new Emirati colleagues in the first nine months of 2023, including into senior positions in core business areas, as well as digital partnerships, compliance, finance, sustainability, credit risk and liquidity management. It is rewarding to see high performers achieving career progression, supported by detailed learning and development programmes, with over 800 UAE nationals being promoted this year.

In this ‘Year of Sustainability’ in the UAE, which is hosting the COP28 global climate conference, ADCB is moving forward with a number of initiatives to support the country’s vision for an inclusive, net zero economy.

Through the issuance of a second green bond in September, we continue to channel global capital into clean energy and sustainable projects in the UAE. In parallel, our businesses are making advancements on product innovation and engagement, continuing to align our substantial financing capabilities with the social and environmental priorities of our customers.

While climate change is the major global challenge of our age, we are inspired by the UAE’s ambition for meaningful transformation. We see investment and participation in the emerging green economy as a major opportunity, and ADCB will work closely with our communities, customers and other stakeholders to support the country’s agenda.